If Jazz has a solid business plan for these CRJ 700 aircraft then by all means lets hear it. If it brings in more revenue and customer satisfaction then I have no problem with it at all. Why hasn't Jazz purchased anything for their charter market other than a couple Dash -8's? They originally wanted 2 CRJ 900 aircraft operated by Freedom Air inc which is a subsidiary of the Mesa group. These aircraft became available during the US Airways/America West merger. They have subsequently been used back in the Mesa operation I believe flying under the Delta brand. US Airways' collective bargaining agreement with the Air Line Pilots Association prohibited contract carrier code share arrangements with regional jet carriers, if that carrier operated aircraft with more than 70 seats. Mesa Airlines, therefore, could not operate as US Airways Express and operate the CRJ-900.
ACE's board last year put the brakes on this before it ever went before Teplitsky. That said, starting soon is the renegotiation of your capacity purchase agreement contract and what I've been hearing is Air Canada is confident a deal will be done soon. And if the rumor is true will be looking to shave between 3-8 cents off the current price. Some department's in Jazz will have to absorb some of those costs.
That said, the deal between Air Canada and Jazz is all about purchasing feed. Nothing more and nothing less.
thrust set wrote:
ACE's board last year put the brakes on this before it ever went before Teplitsky. That said, starting soon is the renegotiation of your capacity purchase agreement contract and what I've been hearing is Air Canada is confident a deal will be done soon. And if the rumor is true will be looking to shave between 3-8 cents off the current price. Some department's in Jazz will have to absorb some of those costs.
That said, the deal between Air Canada and Jazz is all about purchasing feed. Nothing more and nothing less.
Maybe some departments at Jazz will feel something. Lots of OT would be my guess. As you and some of your other comrades know, Jazz cost p/asm is high compared to someone like a United Express carrier. What they don't say is that UAX carriers offer up to over 40% more seatmiles per a/c due to their bigger faster fleet composition and longer ASL. Basic airline economics tells us the best way to decrease CASM is to increase guage and ASL.
Coincidentally Jazz and AC are looking into a signifgant refleet for Jazz, or so the rumour mill goes.
Respectfully its about way more than "purchasing feed". It's about protecting the brand thru safe and reliable service and turning a profit on the revenue the purchased capacity generates. Jazz is in a good place to offer both (especially when the bigger faster birds fly)
According to yesterday's conference call with Randall, A/C and Jazz are still talking about a fleet renewal plan at Jazz. The CPA negotiations should be complete by this summer or fall at the latest and adjustments will be made for the 2009 collective agreements. You can hear the conference call by going to http://www.flyjazz.ca and go under investors column and executive presentations.
A need to reduce costs at jazz ...you bet....economy is going down the toilet in the usa..you bet. Most guys in the stock market basically say Air Canada is a dog and not to buy , but rather sell it, with a target price of $7. Cited reasons are the us economy in recession and the inability of a legacy carrier with still too high costs to adjust to that(which is always the case with a legacy carrier), high oil price which, will stay high and move much higher in the long term, and labour issues. This is not good news for jazz and aircanada considering contracts are expiring on january 1 , 2009. I believe the domestic portion of Air Canada's domestic rsm's will decrease and westjet will take on more pax bit by bit, as they have been doing, until they have at least 50% of the domestic market in canada. respectfully, They have superior service hands down, and will weather any economic storm easily compared to AC, because they are not a bloated legacy carrier.
You are starting to see the collective action of the majors in the usa in merging. I believe northwest and delta, continental and united.i cant remember exactly. With high costs, bloated legacy carriers MUST combine to reduce costs in order to survive. Especially in the usa as they are in recession, oil is high and will go much higher in the future and most importantly oil is priced in us dollars(which is a benefit to canadian carriers). Lean and mean carriers such as southwest will not have a problem.
This is why I do not see much in the way of increased wages at JAzz in the next contract. What will happen at AC, i dont know, i believe the jungle jet wages will not go up much or the threat will be jazz will take the
On other flying for jazz such as charter or another capacity purchase agreement. Respectfully, I laugh at that. Really, there is no incentive for management to obtain more flying. It is the mentality, jazz's job is 99% to feed or fly ACE passengers period. Why worry about anything else? I believe the company is not forward thinking enough to have any significant increase in flying from sources outside the air god world. If they were they would be doing what porter is with Q400 a long time ago. It is typical in any market for the fat cat to not really care about much if things are great , until they get bitten in the *ss from new competition that forms to fill the void. That is the nature of the capitalism. That applies in aviation or any industry.